Oil prices tumble amid trade worries

Apr 06, 2018, 03:33
Oil prices tumble amid trade worries

The markets enjoyed renewed optimism after China threatened the U.S.'s soybean industry, the country's top agricultural export to China.

The gasoline stocks fell by 1.1 million barrels, compared with analysts' expectations for a 1.3 million barrels drop.

U.S. West Texas Intermediate crude for May delivery was down 4 cents at $63.33 a barrel.

Oil prices steadied on Thursday as an easing of trade tensions between the United States and China and a surprise draw in USA crude inventories last week supported the market.

The strength of the USA dollar was a headwind for oil, said Bill Baruch, president of Blue Line Futures in Chicago. The U.S. dollar rose to its highest in more than one month against a basket of major currencies.

Oil prices slipped on Wednesday on expectations for a build-up in USA crude inventories, but Russian government comments on prospects for stepping up cooperation with OPEC to coordinate output cuts braked steeper declines.

Prices pared losses after the Energy Information Administration released data showing USA crude inventories fell by 4.6 million barrels in the latest week. Equities and the US dollar have exerted stronger influence on crude markets this year, as oil has become more closely linked to economic signals.

Prices were also helped by a turnaround in the US stock market. In addition, the pressure on trade is also exerting tension on the trade dispute between the United States and China.

"With total combined stocks of crude oil and refined products coming in around unchanged on the week, I would call it a neutral data point", said Dominic Chirichella, senior partner at the Energy Management Institute in NY.

The extent to which US production increases counterbalances output cuts from the Organization of the Petroleum Exporting Countries will be critical, said Gene McGillian, manager of market research at Tradition Energy in Stamford. The country's crude production rose in March despite the output deal, to 10.97 million barrels per day (bpd) from 10.95 million bpd in February, Russian Energy Ministry data showed, keeping Russia ahead of the United States as the world's biggest crude producer. The cuts run until the end of 2018 but Saudi Arabia has said they could be extended in some form into 2019.

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